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Stock dividends and growth rate

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Question

Equity;Company A currently (that is, as of year 0) pays a common stock dividend of $2.50 per share. Dividends are expected to grow at a rate of 12 percent per year for the next seven years and then to continue growing thereafter at a rate of 5 percent per;year. What is the current value of a share stock to an investor who requires a 12 percent rate of return?

 

Paper#18249 | Written in 18-Jul-2015

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